El Salvador is the first country in the world to recognize Bitcoin as a legal currency. The US dollar has been used by Salvador for two decades. Buchale said the Conchagua volcano will provide the city with full energy and will also provide energy for mining.
Bitcoin mining is the process of generating new bitcoin using computers that solve complex mathematical problems – a process that requires a great deal of energy.
In El Salvador, part of that energy comes from a geothermal plant powered by the Tecapa volcano. Before the government builds a new geothermal plant to operate in Conchago, the city will initially receive energy from the Tecapa plant, Buchale said.
It will be an ecological city with zero carbon dioxide emissions (CO2 emissions), Bukele said.
El Salvador will issue $ 1 billion in Bitcoin bonds by 2022 to finance the project, said Samson Mow, chief strategy officer for blockchain tech provider BlockStream.
Move said the decision was made to invest half of the ‘Volcano bonds’ in Bitcoin and the other half in infrastructure.
“El Salvador will be the economic center of the world,” he said.
Bitcoin City will only charge value added tax (VAT), Buckley said.
He added that their income tax rate will always be zero. Also, capital gains tax, property tax and payroll tax will be zero here.
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